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S&P Global Ratings has lowered its long-term issuer credit rating for the city of Kyiv, Ukraine's capital, to 'CC' from 'CCC+', with a negative outlook.
"The rating action follows Kyiv's decision to extend for another 360 days the maturity of its domestic bond falling due on December 19, 2016, although the city is current in payment on this bond's interest payments. Under our criteria, we would expect to classify such an extension as tantamount to default," S&P said in its statement.
"Moreover, in our view, the default is a virtual certainty. We believe that because this decision has been approved by Ukraine's Ministry of Finance, there is little chance that the city will repay these bonds using its own sources," the statement read.
As reported earlier, Finance Minister OIeksandr Danylyuk stated that there were no objective causes for defaulting or risking the hryvnia exchange rate.
In March, Kyiv ranked first among the top ten major European Cities of the Future 2016/2017, in terms of cost-effectiveness, according to Foreign Direct Investment Magazine's ranking of "European Cities and Regions of the Future 2016-2017".
As UNIAN reported in June, S&P Global Ratings confirmed Ukraine's long-term and short-term ratings at the level of 'B-/ B' with a stable outlook.